Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.

Monday, December 1, 2008

THIS JUST IN – ANNUAL PNC CHRISTMAS PRICE INDEX

It’s that time of year again – time for the annual Christmas Price Index!

The PNC Christmas Price Index increased by 8.1 percent over last year, the second biggest leap in the history of the economic analysis by PNC Wealth Management based on the cost of gifts in the holiday classic, “The Twelve Days of Christmas.”

According to the 24th annual survey, the cost of the PNC CPI is $21,080 in 2008, $1,573 more than last year. The PNC CPI exceeds the U.S. government’s Consumer Price Index – the widely used measure of inflation calculated by the Bureau of Labor Statistics.

Each year, the Christmas Price Index reflects trends in the broader economy. This year, commodities prices, concerns about increased energy and shipping costs, jobs, and a second straight minimum wage increase were major factors in the cost

The cost of seven swans a-swimming saw a whopping 33.3 percent increase due to their scarcity. Large percentage increases were also seen in turtle doves (37.5 percent, to $56 from $40); partridges (33.3 percent, to $20.00 from $15.00) and pear trees (33.3 percent, to $199.99 from $149.99), according to PNC.

But the five gold rings cost less this year. Retail prices dropped by 11.4 percent (to $349.95 from $395) as retailers are trying to move luxury merchandise in light of concerns with the slowing economy.

Two other costs in the CPI dropped this year - the French hens and the geese-a-laying. This year the hens cost $30, a drop of 33.3 percent over last year, and the geese cost $240, falling one-third. The four calling birds remained steady, costing $599.96, the same as a year ago.

.As usual the performing members of the group, the dancing ladies and leaping lords, are paid far more than the musicians – almost twice as much. A better union?

As part of its annual tradition, PNC Wealth Management also tabulates the “True Cost of Christmas,” which is the total cost of items gifted by a True Love who repeats all of the song’s verses. This holiday season, very generous True Loves will pay more than ever before—$86,609—for all 364 items, up from $78,100 in 2007, a staggering 10.9 percent increase

For those who prefer the convenience of shopping online, PNC Wealth Management also calculates the cost of “The Twelve Days of Christmas” gifts purchased on the Web. In general, Internet prices are higher than their non-Internet counterparts because of shipping costs for birds and the convenience factor of shopping online.

This year, the trends identified in the traditional index are repeated in the Internet version, with an overall price growth of 2.8 percent, significantly less than the traditional PNC CPI increase of 8.1 percent..Click here for a comparative chart of the Christmas Price Index, and here for the website.

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